Arago Raises $26m In Seed Funding To Slash AI Energy Consumption With Breakthrough Photonic Chip

● Less than a year after it was founded, Arago – backed by leaders from Apple, Nvidia, Microsoft, Hugging Face and top deeptech VCs – unveils a light-powered processor designed to cut AI energy use by 10×.

● Results show that Arago's technology can power AI models from industry standard environments.

● Funding will be used to accelerate product development for commercialisation, growing the team across multiple development sites, and deepening business partnerships.

Paris, July 8th, 2025 – Arago, a Paris and Silicon Valley-based deeptech startup pioneering a new class of energy-efficient AI chips powered by light, has raised $26 million in seed funding to accelerate the commercialization of its photonic processor, codenamed “JEF”.

The surge in AI adoption has led to exponential – and unsustainable – growth in energy consumption. Arago’s mission is to radically rethink AI’s compute infrastructure so that the technology can have a viable future for everyone.

A new era of photon-powered AI.

The heart of “JEF” is a proprietary photonic technology: instead of transistors, it uses lasers to process data with photons – particles of light that generate far less heat than electrons in conventional processors. By harnessing these inherent advantages, the chip is designed to deliver 10× lower energy consumption than today’s leading GPUs at equivalent performance and cost.

Early results demonstrate that “JEF” can run AI models from industry-standard software frameworks while staying fully compatible with the existing AI ecosystem, compute infrastructure, and manufacturing processes. It also sidesteps the technical barriers that have historically limited the performance of photonic and GPU-alternative processors.

Nicolas Muller, Arago’s CEO and co-founder, said: “To build a product that’s not only high-performing but also truly usable, it’s critical to deeply understand the constraints of integrating a component based on a different compute principle into the broader ecosystem. We don’t have the luxury of waiting for the ecosystem to adapt – our technology needs to be compatible with everything from manufacturing processes to the AI software stack from day one.”

“Innovation in computing is one of the hardest deeptech challenges,” added Thong Le Hoang, co-founder of Visionaries Tomorrow. “Arago’s superpower lies in its first-principles vision of the future, combined with a deep understanding across digital, analog, and photonic approaches. The result is a unique hybrid architecture built on the latest industry breakthroughs and engineered to deliver step-change performance gains in the near term.”

World class expertise backed by visionary investors.

Founded less than a year ago by Nicolas Muller, Eliott Sarrey and Ambroise Müller – whose combined expertise spans photonics, electronics, software, mathematics and machine learning – Arago has assembled a lean team of 20 experts from the world’s leading tech companies and research lab.

Pierre Boudier, former Nvidia Fellow and Lead GPU Architect at Intel, said: “I’ve worked with Nvidia CEO Jensen Huang for nearly a decade. I know what it takes to succeed in this industry, and I see a lot of those same qualities in the Arago team.”

The oversubscribed $26 million seed round was co-led by Earlybird, Protagonist and Visionaries Tomorrow, with participation from Generative IQ and C4 Ventures, among others. The round also includes investment from prominent angel investors across the semiconductor, AI, and software industries, including Bertrand Serlet (former VP at Apple and co-founder of Fungible), Christophe Frey (GM at Arm), Olivier Pomel (co-founder of Datadog), Thomas Wolf (co-founder of Hugging Face), and Jack Abraham (co-founder of Exowatt), among others.

“Arago is creating a ‘DeepSeek moment’ for AI chips,” said Earlybird co-founder Hendrik Brandis. “This technology has the potential to defy the laws of AI compute, using only a fraction of the resources. The Arago team is executing towards this moment with unseen velocity and frugality.”

Arago will use its funding to accelerate product development toward commercialization, grow its team across France, North America, and Israel, and deepen business partnerships to scale its growth.

About Arago:

Arago is an AI and computer hardware company developing an energy-efficient AI chip powered by light. Arago’s proprietary technology is designed to deliver 10× lower energy consumption than today’s leading GPUs at equivalent compute performance and cost while remaining fully compatible with industry-standard software frameworks and hardware components. Arago has assembled a world-class team of engineers, scientists, and operators from leading companies and universities, and is backed by executives from Apple, Arm, Nvidia, and Hugging Face, along with prominent deeptech venture firms.

About Earlybird:

Founded in 1997, Earlybird identifies and backs exceptional early-stage companies on a pan-European basis – supporting them through their growth and development phases and providing financial resources, strategic support, plus access to an international network and capital markets. Through two separate strategies, Earlybird focuses on tech-enabled businesses in fintech/ insurtech, enterprise software, and deep tech (energy, food, and space) while Earlybird Health focuses on improving patient outcomes. Earlybird additionally has a Growth Opportunity Fund for follow-on investments, and a pro-bono impact initiative, Vision Lab. With EUR 2.5 billion under management across fund streams and a history of 9 IPOs and 35 trade sales, Earlybird is among Europe’s most established and active venture capital firms.

About Protagonist:

Protagonist is a multi-stage venture capital firm founded by serial entrepreneurs George Bousis, Harry Hurst, and George Ruan. The firm invests across sectors including AI, deep tech, consumer, blockchain and fintech. Protagonist partners with founders throughout their lifecycle, bringing hands-on, operational expertise in building multi billion dollar businesses. Investments include companies such as xAI, Tenstorrent, Epirus, and Roam.

About Visionaries Tomorrow:

Visionaries Tomorrow is an early-stage venture capital fund investing in mission-driven founders building breakthrough technology to push the frontiers of the industrialized world - rewiring legacy industries and opening entirely new markets. By connecting industrial deep tech startups with the scaling know-how of Europe’s leading industrial giants and family businesses, Visionaries Tomorrow supercharges the pioneers of the next industrial revolution from lab to global scale for a brighter future.